The information value of R&D alliances: The preference for local or distant ties

Abstract

Using a Bayesian learning model, the authors provide a formal understanding of the strategic implications of a firm’s R&D alliance activity through its local or distant ties. A major advantage of the model is that it facilitates an explicit analysis of the factors that determine a firm’s potential to learn from its R&D alliances. The article’s theoretical approach shows how technological uncertainty, information redundancy and heterogeneity of information accuracy jointly affect the formation of inter-firm alliance ties.